Foreign Assets of Small Taxpayers Disclosure Scheme, 2026

Foreign Assets of Small Taxpayers Disclosure Scheme, 2026 – FAQs

The Foreign Assets of Small Taxpayers Disclosure Scheme, 2026 (FAST-DS) is a one-time voluntary disclosure mechanism introduced under Chapter IV of the Finance Act, 2026, comprising Sections 130 to 144, along with the Foreign Assets of Small Taxpayers – Disclosure Scheme Rules, 2026.

The scheme provides an opportunity to eligible taxpayers to disclose specified foreign assets and foreign income subject to the prescribed conditions and payment requirements.

A. Key Details of the Scheme

1. What is the FAST-DS Scheme, 2026?

FAST-DS is a one-time voluntary disclosure scheme under the Finance Act, 2026. It allows eligible taxpayers to disclose specified foreign assets or foreign income that was previously not disclosed, subject to payment of the prescribed tax or fee.

2. From when will the Scheme be effective?

The scheme will become operational from 16 August 2026.

3. What is the deadline for making a declaration?

Declarations can be submitted up to 31 December 2026. No declaration will be accepted after this date.

4. Which date will be considered for valuation?

The prescribed valuation date is 31 March 2026. The fair market value (FMV) of the relevant asset is required to be determined with reference to this date.

5. Which authority will administer the Scheme?

The scheme will be administered by the Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems), as applicable. The declaration and related process will be carried out electronically.

B. Eligibility

6. Who can make a declaration under FAST-DS?

An assessee may qualify if:

• the person was a resident in India, as determined under Section 6 of the Income-tax Act, 1961, during the relevant previous year; or
• the person was a non-resident or RNOR during the relevant previous year but had been resident in India either:
  • in the previous year to which the undisclosed foreign income relates; or
  • in the previous year in which the foreign asset was acquired.

7. Can a person who is currently a non-resident use the Scheme?

Yes. A person who is presently non-resident may qualify where the person was resident in India in the relevant year of undisclosed income or in the year in which the undisclosed foreign asset was acquired.

8. Does RNOR status have any significance?

Yes. The scheme specifically takes into account non-residents and Resident but Not Ordinarily Resident (RNOR) individuals satisfying the prescribed residency conditions.

The declarant is required to provide the applicable residential status for the relevant previous year in Form 1.

9. Under what circumstances can a declaration be submitted?

A declaration may be made where the assessee:

• did not furnish a return under Section 139 of the Income-tax Act;
• filed a return but failed to disclose the relevant foreign asset or income; or
• has income or an asset that has escaped assessment within the meaning of Section 147 of the Income-tax Act.

10. During which period can the declaration be filed?

Declarations can be submitted from 16 August 2026 through 31 December 2026, both dates being inclusive.

11. Can the declaration relate to an earlier previous year?

Yes. The scheme permits declarations concerning any previous year, provided the relevant income or asset falls within the categories covered by Section 133 and all applicable monetary and other conditions are satisfied.

C. What Can Be Disclosed?

12. What types of foreign assets or income can be disclosed?

Broadly, the scheme covers two categories:

Category 1:
Undisclosed foreign assets or foreign income that was not previously offered to tax.

Category 2:
Foreign assets that were already acquired from income offered to tax, or acquired during a period when the assessee was non-resident, but were not reported in the applicable foreign-asset schedule of the income-tax return.

13. What is meant by an undisclosed foreign asset?

An undisclosed foreign asset includes an asset or financial interest situated outside India that is held in the assessee’s name or where the assessee is the beneficial owner, and for which the source of investment has not been satisfactorily explained.

14. What constitutes undisclosed foreign income?

It refers to income arising from a source outside India that was taxable in India but was not included in the income offered to tax.

15. What is the maximum value permitted for Category 1 declarations?

For Category 1, the combined value of the undisclosed foreign assets as on 31 March 2026, together with undisclosed foreign income, must not exceed ₹1 crore.

16. What is the limit for Category 2 declarations?

For Category 2, the aggregate value of the foreign assets covered by the declaration must not exceed ₹5 crore.

D. Tax or Fee Payable

17. How much is payable for Category 1?

The amount payable consists of:

1. tax at 30% of the value of the undisclosed foreign asset or undisclosed foreign income; and
2. an additional amount equivalent to the tax calculated above.

Effectively, the combined liability works out to 60% of the relevant value/income.

18. Can you explain the calculation with an example?

Suppose an assessee has:

• an undisclosed foreign bank account valued at ₹60 lakh; and
• undisclosed foreign income of ₹20 lakh.

The calculation would be:

Thus, the total amount payable would be ₹48 lakh.

19. What is payable for Category 2?

A fixed fee of ₹1 lakh is payable, provided the aggregate value of the qualifying foreign assets does not exceed ₹5 crore.

20. What happens if the foreign assets are worth ₹6.5 crore?

The assessee would not qualify for the scheme because the prescribed ceiling for Category 2 declarations is ₹5 crore.

E. Valuation of Foreign Assets

21. How is the fair market value generally determined?

As a general principle, the FMV is the higher of:

• the cost of acquisition; or
• the amount the asset could reasonably fetch in an open-market transaction on the valuation date.

Where applicable, the market value should be supported by a valuation report from a valuer recognised by the government or its relevant agency in the country where the asset is situated.

If such valuation is not undertaken, the indexed cost of acquisition is treated as the FMV.

22. How are bullion, jewellery and precious stones valued?

The FMV is the higher of the acquisition cost and the open-market value as on 31 March 2026.

Where a recognised valuation is not obtained, the indexed acquisition cost is treated as the FMV.

23. How are paintings, sculptures and other artistic or archaeological items valued?

The same general principle applies. The higher of the acquisition cost and open-market value on the valuation date is considered.

If the prescribed valuation is not undertaken, the indexed cost of acquisition is treated as the FMV.

24. How is FMV determined for quoted shares and securities?

The FMV is the higher of:

• the acquisition cost; or
• the average of the lowest and highest quoted prices on an established securities market on the valuation date.

25. What if quoted shares were not traded on 31 March 2026?

If there was no trading on the valuation date, the average of the lowest and highest quoted prices on the nearest preceding trading day is considered.

26. How are unquoted equity shares valued?

The FMV is the higher of the acquisition cost and the value determined using the prescribed formula.

The formula takes into consideration relevant items such as the book value of specified assets, FMV of bullion, jewellery, securities and immovable property, specified liabilities and the paid-up value of equity shares.

If the prescribed valuation is not carried out, indexed acquisition cost is considered as FMV.

27. How are unquoted securities other than equity shares valued?

The higher of acquisition cost and the open-market value on the valuation date is taken as FMV.

The open-market value should ordinarily be supported by a valuation report from a recognised valuer. In its absence, indexed acquisition cost is treated as FMV.

28. How is foreign immovable property valued?

The FMV is the higher of:

• acquisition cost; or
• the open-market value as on 31 March 2026.

The market valuation should be supported by a valuation report issued by a valuer recognised by the relevant government or its agency in the country where the property is situated.

Where such valuation is not undertaken, indexed acquisition cost is treated as FMV.

29. How is a foreign bank account valued?

For a foreign bank account, the value is generally determined by aggregating the deposits made into the account from the date of opening up to the valuation date.

Certain amounts are excluded to prevent the same funds from being counted more than once.

For example, deposits arising from withdrawals previously made from the same account are excluded. Similarly, where the account had earlier been declared under Chapter VI of the Black Money Act, 2015 and tax and penalty had already been paid, only deposits made after that earlier declaration are considered.

30. How does the bank-account valuation work in practice?

Assume a foreign bank account was opened in 2010 and the following transactions occurred:

Accordingly, the value considered for the bank account would be $4,900, which must be converted into Indian rupees using the prescribed conversion mechanism as on 31 March 2026.

31. What if the same bank account had already been declared under the Black Money Act?

In such a case, only deposits made after the earlier declaration are taken into account, subject to the applicable rules.

Using the same illustration, the relevant value would be $3,100, which would then be converted into Indian rupees as on 31 March 2026.

32. How is an interest in a foreign partnership, AOP or LLP valued?

The valuation involves the following broad steps:

1. Determine the entity’s net assets as on the valuation date.
2. Allocate the portion corresponding to the capital contribution among the partners or members in proportion to their capital contribution.
3. Distribute the remaining net assets according to the agreement applicable on dissolution. If there is no such agreement, the residual amount is allocated according to the profit-sharing ratio.

33. How are assets valued when the Rules do not prescribe a specific method?

For such assets, FMV is generally the higher of:

• the acquisition cost or amount invested; or
• the price that the asset would fetch in an arm’s-length open-market transaction on the valuation date.

Where such valuation is not carried out, indexed acquisition cost is treated as FMV.

34. What happens when proceeds from one foreign asset are used to acquire another?

The scheme seeks to avoid double counting of the same funds.

Where proceeds from the sale of one asset, or money withdrawn from a bank account, are subsequently invested in another asset, the amount reinvested is reduced from the value of the original asset/account. The newly acquired asset is then valued separately.

For example, if proceeds from selling a foreign house are deposited in a bank account and a portion is subsequently used to purchase another property, the relevant amount is excluded from the bank-account valuation while the new property is independently valued.

35. In which currency must foreign assets be reported?

Values are required to be reported in Indian rupees.

Where the foreign currency is one of the currencies designated under the relevant RBI regulations, conversion into INR is made using the RBI reference rate applicable on the valuation date.

For other currencies, the amount is first converted into US dollars using the rate specified by the central bank or, where applicable, another regulated bank in the country where the asset is located. The resulting US-dollar amount is then converted into INR using the RBI reference rate on the valuation date.

36. Will a difference between the declared FMV and the value subsequently determined by the Assessing Officer invalidate the declaration?

For assets other than bank accounts, a variation of up to 20% of the declared FMV will not, by itself, make the declaration invalid on the ground of misrepresentation, suppression of facts or furnishing incorrect particulars.

F. Filing the Declaration

37. How is the declaration submitted?

The declaration is required to be furnished electronically in Form 1 to the prescribed income-tax authority.

38. Can multiple assets or income items be included in one declaration?

Yes. A single Form 1 can contain multiple assets or income items. The relevant sections and annexures may be repeated as required.

39. Are supporting documents required?

Yes. Form 1 requires supporting evidence relating to the acquisition of the asset or earning of the relevant income.

Where valuation has been undertaken, the applicable valuation report is also required, including for assets such as foreign immovable property, jewellery, artistic works and unquoted shares or securities.

G. Processing, Order and Payment

40. What happens after Form 1 is submitted?

After electronic verification, the income-tax authority will determine the amount payable and communicate the same through Form 2.

The order is to be issued within one month from the end of the month in which the declaration was submitted.

41. How long is available to make payment after Form 2?

The amount specified in Form 2 is required to be paid within two months from the end of the month in which the order is received.

42. Is additional time available if the amount cannot be paid within the initial period?

Yes. An additional period of up to two months may be available, subject to payment of simple interest at 1% for every month or part of a month of delay.

43. How is interest calculated on delayed payment?

Where payment is made during the permitted extended period, simple interest is charged at 1% per month or part thereof on the amount payable.

44. Is there a final deadline beyond which the scheme benefit is lost?

Yes. Payment must be completed within the maximum permitted period, which extends to four months from the end of the month in which Form 2 was passed.

Failure to make payment within this outer period results in the declaration losing the benefit of the scheme.

45. How should payment be intimated to the tax authority?

After making payment, the declarant must electronically furnish Form 3 along with proof of payment, including interest wherever applicable, within the prescribed period.

46. What document is issued after payment?

Once the payment intimation is verified against the Form 2 order, the income-tax authority issues an electronic certificate/order in Form 4.

This is generally issued within one month from the end of the month in which the payment intimation is received.

H. Consequences and Benefits of a Valid Declaration

47. Can the taxpayer seek rectification, revision or other relief for an assessment after making a declaration?

No. In relation to the income or asset covered by the declaration or the amount paid under the scheme, the declarant cannot subsequently seek rectification or revision of an assessment already completed under the Income-tax Act or the Black Money Act.

The declarant also cannot claim a set-off or relief in an appeal, reference or other proceedings concerning such assessment.

48. What immunity is available after a valid declaration and payment?

A valid declaration followed by the prescribed payment provides immunity from further tax and penalty, as well as prosecution under the Black Money Act, 2015, in respect of the income or asset covered by the declaration.

Further, the declared income or investment amount relating to the declared asset is not included in the taxpayer’s total income under the Income-tax Act or the Black Money Act, subject to the scheme’s conditions.

49. What happens if assessment proceedings are already pending?

Where assessment proceedings under the Income-tax Act or the Black Money Act are pending in relation to the income or asset covered by the declaration, the Assessing Officer is required to take the declaration into consideration while completing the assessment.

I. Cases Where FAST-DS Is Not Available

50. In which circumstances can the Scheme not be used?

The scheme does not cover:

• income or assets that directly or indirectly represent proceeds of crime where proceedings have been initiated or are pending under the Prevention of Money-laundering Act, 2002; or
• income or assets relating to an assessment year for which assessment proceedings under the Black Money Act, 2015 have already been completed.

Important Note

The above FAQ is a simplified, reader-friendly presentation of the provisions contained in the FAST-DS material. Taxpayers should examine the Finance Act, 2026, the applicable Rules, prescribed forms and other official clarifications before making a declaration.

Go To FAQs

Also Read: “CBDT Notifies New Forms PAN CR-01 & PAN CR-02 for PAN Correction from 1 April 2026”

Also Read: FAQs and Guidance notes on Forms under Income-tax Rules, 2026

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